Friday 13th November 2015: Limerick City and County Council has said "significant pressures" have been placed on its available funds for 2016 because of a reduction in income arising from a new business rate re-evaluation process nationally.
Publish Date: Friday 13th November 2015
Limerick City and County Council has said "significant pressures" have been placed on its available funds for 2016 because of a reduction in income arising from a new business rate re-evaluation process nationally.
A reduction in the global valuation of utilities such as telecommunications and energy companies was announced in early November and equates to a €1.7 million reduction in the Commercial Rate income of Limerick City and County Council.
While the majority of rate payers will benefit from an average 5% reduction in their rates as a result of the introduction of a proposed number of incentive schemes, it has been necessary to apply an increase on an estimated 9% of Rated properties in Limerick, namely those with an annual rate demand of more than €10,000. The Council said that the income reduction in the Global Revaluation of utilities is the main reason for its proposal to increase commercial rates in Limerick by 4.5% at next Friday's Statutory Budget Meeting.
Among the financial support schemes being introduced by the Council to offset the proposed increase for more than 90% of Rated Properties is a Small & Medium Business Support Scheme and a Tourism Sector Support Scheme, while the existing Business & Retail Incentive Scheme is being extended across all towns and villages in Limerick.
The Annual Rate of Valuation (ARV) in Limerick will remain the lowest of all cities in the country.
Outlining the background to the proposed Commercial Rate increase, Sean Coughlan, Acting Head of Finance, Limerick City and County Council said: "The increase is the result of significant pressures being placed on the available funds of the Council for 2016. The Commercial Rate has been reduced by the level of appeals to the Revaluation Process carried out during 2014, resulting in reduced income of €750,000 (1.5% of ARV), and the reduction in the global valuation of utilities such as telecommunications and energy companies, equating to €1.7 million in reduced income (3% of the ARV)."
"It is against this backdrop of reduced income that the Budget is framed on a 4.5% increase on the ARV. It should be noted that even with the 4.5% increase in the ARV, the Commercial Rate income is still lower by €50,000 versus the adopted Budget 2015," he added.
Mr. Coughlan noted that a number of financial support schemes would offset the proposed Rate increase for the majority of businesses in Limerick.
Pending its approval by Elected Members at Friday's Budget Meeting, Limerick City and County Council is proposing a Small & Medium Business Support scheme, which will pay a financial support to occupiers of commercial properties with total annual commercial rates bills of up to and including €10,000 but not less than €500 in 2016.
According to Mr. Coughlan: "The average support across the qualifying group is 5% and this scheme highlights Limerick City and County Council's commitment to the SME sector It should be noted that almost 90% of the Rated properties in Limerick City and County Council have an annual rate demand of less than €10,000."
The Council is also proposing to extend the existing Business & Retail Incentive Scheme to all towns and villages in Limerick. The extension of the Scheme, which is currently only available in Limerick City, Abbeyfeale, Kilmallock, Newcastle West and Rathkeale, is intended to address property vacancy rates, improve streetscapes and to support the business community.
Meanwhile, the proposed Tourism Sector Support Scheme for 2016 will be a financial support to occupiers of commercial properties directly linked to the tourism and hospitality sector. In order to qualify, the total annual Commercial Rates liability must be in excess of €10,000 (businesses with a Rate Demand less than €10,000 already qualify for the SME Scheme 2016) and is subject to a number of terms and conditions. The support grant payment which is aimed specifically at the Tourism Sector will be increased to 5% of the total Rates, including arrears, for 2016.
The Statutory Budget Meeting of Limerick City and County Council will take place at 10am on Friday, 20th November 2015 in the Council Chamber, Dooradoyle, Limerick.